I'm the Detroit bureau chief for Forbes, which means I spend most of my time covering the automotive industry. But I also keep an eye on the rest of America's heartland—where stuff is manufactured and grown. I've been on the auto beat for more than 20 years at Forbes, Business Week and the Detroit Free Press. At the Boston Globe, I rode the tech bubble for a while, but I found there's nothing quite as fun as the auto beat. Whether you drive a car or not, everyone has an opinion about cars or car companies. What's yours?

Really, Chrysler? Don't Pick A Fight With Tesla Over Taxpayer Loans. You Will Lose.

Chrysler Group, which is enjoying a nice rebound in the U.S. market, would be wise to stay focused on the road ahead rather than revisiting the circumstances of its 2009 government bailout.

But the company’s top spokesman, Gualberto Ranieri, just couldn’t resist poking Tesla MotorsTesla Motors chief executive Elon Musk in the eye after the California electric vehicle maker announced Wednesday it had paid off the $451.8 million balance on its loan from the U.S. Department of Energy, nine years ahead of schedule. “Following this payment, Tesla will be the only American car company to have fully repaid the government,” Tesla said in a statement.

Not so fast, argues Chrysler. In a blog post Wednesday evening, Ranieri wrote: “The information is unmistakably incorrect. It’s pretty well-known that almost exactly two years ago – May 24, 2011 – Chrysler Group LLC repaid (in full and with interest) U.S. and Canadian government loans more than six years ahead of schedule. Question: short memory or short-circuit?”

I think Ranieri, an intelligent and thoughtful public relations man, is the one with a short-circuit. Why else would he dredge up details of how Chrysler, on the brink of liquidation, received billions of dollars in loans from the U.S. government, which then handed the company over to Fiat, an Italian company, with U.S. taxpayers ending up on the short end of the deal?

Does he really want to go there?

Besides, the Tesla statement was referring to a loan program under the U.S. Department of Energy to promote development of cleaner vehicles. Chrysler had applied for a DOE loan, but got tired of waiting for a decision and withdrew its application. A total of five companies received DOE loans under the Advanced Technology Vehicle Manufacturing program. Two of them, Fisker Automotive and Vehicle Production Group, have halted production and are looking for buyers. Ford MotorFord Motor, which received $5.9 billion, and Nissan North America, which won $1.4 billion, are paying their loans on schedule. Of the five recipients, only Tesla has repaid its loan in full.

What about Chrysler?

Let’s take a walk down Memory Lane: In late 2008, the auto industry was in a tailspin amid a credit crisis triggered by the collapse of Lehman Brothers. On Jan. 2, the U.S. Treasury, under former President George W. Bush, loaned Chrysler $4 billion just to keep the company alive during the crisis. By May, the new Obama Administration concluded Chrysler wasn’t viable, and pushed it into a pre-packaged bankruptcy, pledging another $4.5 billion in debtor-in-possession financing that would allow the carmaker to keep operating while it restructured. (In most bankruptcies, DIP financing is provided by banks or other lenders. But in this case, because of the severe banking crisis, there was no other source of funds.)

As part of the restructuring, the government sold the carmaker’s “good assets” to a new company, Chrysler Group, controlled by Fiat, leaving behind billions in loans to “old Chrysler” that didn’t need to be repaid. When the new Chrysler Group emerged from bankruptcy, it had less than $6 billion in government loans on its books.

In May 2011, Chrysler paid off its remaining $5.1 billion loan balance — “in full and with interest,” as Ranieri correctly notes — and cancelled its right to draw another $2.1 billion. Fiat, meanwhile, bought out the remainder of Treasury’s stake in the company, ending the government’s involvement for good.

In all, the U.S. government committed a total of $12.5 billion to bailing out Chrysler (not including $1.5 billion loaned to Chrysler Financial, a separate company). As Treasury noted in a July 2011 statement, “more than $11.2 billion of that amount has been returned to taxpayers through principal repayments, interest, and cancelled commitments. Treasury is unlikely to fully recover the difference of $1.3 billion owed by Old Chrysler.”

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